Oil rises again but global economic concerns cap gains

NEW YORK (Reuters) - Crude prices edged higher on Thursday, supported by comments from the U.S. Federal Reserve chairman that lifted equity markets, but a more than week-long oil rally slowed as optimism surrounding U.S.-China trade talks faded.

Brent crude LCOc1 futures rose 24 cents, or 0.4 percent, to settle at $61.68 a barrel. The global benchmark posted its first consecutive nine-day winning streak since September 2007.

West Texas Intermediate crude CLc1 ended 23 cents, or 0.4 percent, higher at $52.59 a barrel, also its ninth straight day of gains, that beats a 2010 record.

Earlier in the session, both benchmarks hit their highest in nearly a month. WTI hit a session high of $52.78 per barrel and Brent rose to $61.91 a barrel.

Global financial markets have climbed recently on hopes that Washington and Beijing would avert an all-out trade war. The two superpowers concluded three days of talks on Wednesday.

But the rise in global markets began to dwindle after the world’s two largest economies issued vaguely positive statements that lacked concrete details.[.N][USD/]

Comments by Federal Reserve Chairman Jerome Powell on Thursday helped boost riskier asset classes, including oil, late in the session.

Powell said the U.S. central bank had the ability to be patient on policy, but that the Fed would shed significantly more assets than it already has.

“It was a mixed message from him, but I think it was sufficiently accommodative,” said John Kilduff, a partner at Again Capital Management. “It’s a continuation of that shift towards easier policies and more assistance to the underlying economy which helped boost crude oil prices.”

However, investors remained worried about a potential slowdown in the global economy, with disappointing data from China overnight adding to concerns.

China’s producer prices in December rose at their slowest pace in more than two years, a worrying sign of deflationary risks.

Market participants also were paying close attention to global crude supply, particularly a shale boom in the United States. U.S. crude oil production C-OUT-T-EIA has held around a record high of 11.7 million barrels per day since early November, according to government data.

To counter rising U.S. output, the Organization of the Petroleum Exporting Countries and its allies, including Russia, reached a deal to rein in supply that officially began in January.

Barclays forecast that Brent will remain range bound at $55 to $65 per barrel as inventories build in the coming months, while it expects “the market will return to a balanced state” by the second half of 2019.